In classic SBA style, there’s been a lot of updates on PPP over the last few days – and we’re sure your members will benefit from the run down from Abrigo.  Whether they decide to partner with Abrigo or not for origination of these loans, these resources will help all of your members navigate this round of PPP.
 
Materials to share:
 
Abrigo has begun supporting community financial institutions participating in the latest round of PPP through its Sageworks SBA Lending solution. Customers leveraging the solution can simplify and automate the underwriting processes of PPP so you can quickly get money into the hands of small business owners. Learn how you can get implemented and begin automating PPP loans within 48 hours.
 
Press Release – Abrigo is Ready & Customers are Live
Webinar Recording – What’s Changed with PPP in 2021
PPP Live Demo – First is Tuesday (1/12) at 3 PM EST, and we’ll be adding additional dates and times each day
Blog post – Lender guidance for borrowers wanting a second loan

​WASHINGTON – The U.S. Small Business Administration (SBA), in consultation with the Treasury Department, announced today that the Paycheck Protection Program (PPP) will re-open the week of January 11 for new borrowers and certain existing PPP borrowers. To promote access to capital, initially only community financial institutions will be able to make First Draw PPP Loans on Monday, January 11, and Second Draw PPP Loans on Wednesday, January 13.  The PPP will open to all participating lenders shortly thereafter. Updated PPP guidance outlining Program changes to enhance its effectiveness and accessibility was released on January 6 in accordance with the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
This round of the PPP continues to prioritize millions of Americans employed by small businesses by authorizing up to $284 billion toward job retention and certain other expenses through March 31, 2021, and by allowing certain existing PPP borrowers to apply for a Second Draw PPP Loan.
“The historically successful Paycheck Protection Program served as an economic lifeline to millions of small businesses and their employees when they needed it most,” said Administrator Jovita Carranza.  “Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery.”
“The Paycheck Protection Program has successfully provided 5.2 million loans worth $525 billion to America’s small businesses, supporting more than 51 million jobs,” said Treasury Secretary Steven T. Mnuchin.  “This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19.  We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”
(more)
 
Key PPP updates include:

• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan. 

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

 
The new guidance released includes:

• PPP Guidance from SBA Administrator Carranza on Accessing Capital for Minority, Underserved, Veteran, and Women-owned Business Concerns;
• Interim Final Rule on Paycheck Protection Program as Amended by Economic Aid Act; and
• Interim Final Rule on Second Draw PPP Loans.

 
For more information on SBA’s assistance to small businesses, visit sba.gov/ppp or treasury.gov/cares. 
 
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About the U.S. Small Business Administration
The U.S. Small Business Administration helps power the American dream of business ownership. As the only go-to resource and voice for small businesses backed by the strength of the federal government, the SBA empowers entrepreneurs and small business owners with the resources and support they need to start, grow or expand their businesses, or recover from a declared disaster. It delivers services through an extensive network of SBA field offices and partnerships with public and private organizations. To learn more, visit www.sba.gov.
 

With the Senate bringing two separate measures that include Paycheck Protection Program forgiveness simplification to a vote starting today, ICBA continues calling on community bankers and their small-business contacts to weigh in with lawmakers.
 
ICBA's Be Heard grassroots action center allows community bankers and small-business owners to urge Congress to address the deduction of Economic Injury Disaster Loan advances from PPP loan forgiveness. ICBA encourages community bankers to direct borrowers to the small-business alert.
 
While borrowers may receive up to a $10,000 EIDL advance, those funds will be deducted from PPP loan forgiveness. ICBA has repeatedly raised this issue with Congress and the SBA, reiterating it Monday in a new joint message to lawmakers.
 
Meanwhile, ICBA continues calling on community bankers and small-business owners to urge Congress to immediately pass bipartisan legislation to simplify PPP forgiveness.
 
While the Senate measures are not expected to pass amid ongoing stimulus talks, ICBA continually works to ensure these PPP priorities remain a key part of the debate.
 ​

​ICBA: Exclude PPP loans from asset calculationsICBA called on Congress to direct federal regulators to exclude Paycheck Protection Program loans from bank and bank holding company asset threshold calculations.
 
In letters to House and Senate leaders, ICBA noted that the surge of PPP loans has swelled the balance sheets of community banks. Absent a legislative fix, asset-size growth will inadvertently push many community bankers over regulatory thresholds and subject them to additional supervision, regulations, and costs.
 
Whereas banks normally have advanced notice that they are close to crossing an asset threshold and invest in a strategic plan to comply with additional regulations, rapid asset increases due to PPP lending have caused temporary balance sheet inflation.
 
"This is an exceptional circumstance and bank regulation must be flexible enough to account for it rationally and ensure that PPP lenders are not punished with regulatory costs simply for their participation in an emergency program," ICBA wrote.

 The Independent Community Bankers of America (ICBA) today said recently released data show that community banks are the unequivocal leaders of the U.S. economic recovery due to their outsized role as providers of Paycheck Protection Program (PPP) small-business loans.
According to the Small Business Administration data, community banks:

• Were the predominant PPP lenders, serving 57.5 percent of all PPP recipients and 48.1 percent of all U.S. small businesses with 2.8 million loans.
• Supported underrepresented small businesses, providing most loans to minority-owned (72.6 percent), women-owned (71.5 percent), and veteran-owned small businesses (63.4 percent).
• Served communities of all kinds, making PPP loans in 98.2 percent of low-income or economically distressed counties, 96.6 percent of rural counties, and 92.4 percent of urban counties.
• Had the faster turnaround times among lenders, processing PPP loans five to 10 days faster than other PPP lenders.
• Saved jobs in critical areas of the economy, with nearly half of the 33.7 million jobs they saved part of the accommodation and food services, health care and social assistance, retail trade, and manufacturing sectors.

 "The Paycheck Protection Program data clearly demonstrate community banking’s leading role in the nation's economic response to the COVID-19 pandemic," ICBA President and CEO Rebeca Romero Rainey said. "As American consumers and small businesses in urban, suburban, and rural communities grapple with historic challenges, they can rest assured that their local community bank is there for them every step of the way."
ICBA and community bankers continue calling on Congress to advance needed PPP reforms in the next stimulus package.

With Congress continuing to debate the next economic stimulus package, community bankers can continue using ICBA's Be Heard grassroots action center to weigh in with recommendations.
ICBA's custom message encourages lawmakers to advance a more straightforward approach to Paycheck Protection Program loan forgiveness as well as capital, accounting, and tax relief.
Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza are scheduled to testify before the House Small Business Committee this Friday on the federal pandemic response.
ICBA last week released talking points and a sample letter to borrowers about the agencies' release of information about individual PPP loans. ICBA also offers a sample press release and op-ed on PPP efforts on its Tell Your Story toolkit.

Following the SBA and Treasury Department release of information about individual Paycheck Protection Program loans, ICBA released talking points and a sample letter to PPP borrowers about the agency announcement.
The member-protected talking points and letter template note that the federal agencies—not community banks—released the loan-level information. The resources are available to help community banks who receive questions from PPP borrowers.
The SBA and Treasury released business names, addresses, lender names, and other information for loans of $150,000 and up, which account for nearly three-quarters of the dollar volume of PPP loans. For loans below $150,000, the agencies will not release business names but will report loan totals, aggregated by ZIP code, industry, business type, and various demographic categories.
Overall, SBA and Treasury said the 4.9 million PPP loans have supported more than 51 million jobs and more than 80 percent of small-business employees, with 27 percent of program funds reaching low- and moderate-income communities.
The data release follows the extension of the PPP application deadline until Aug. 8 shortly after the SBA stopped accepting PPP applications last week. The agency has roughly $130 billion in remaining PPP funds.
ICBA continues urging community bankers to use its Be Heard grassroots action center to recommend reforms to include in the next economic relief package, which Congress is debating now. Community bankers can also access ICBA’s Tell Your Story toolkit for a sample press release and op-ed to share the positive impact of their PPP efforts.

The data release also includes overall statistics regarding dollars lent per state, loan amounts, top lenders, and distribution by industry.  The loans have reached diverse communities proportionally, across all income levels and demographics.
In addition, the data provides information regarding the sizes of participating lenders and participation by community development financial institutions, minority depository institutions, Farm Credit System institutions, fintechs and other nonbanks, and other types of lenders.  It further contains data showing the reach of the program in underserved communities, rural communities, historically underutilized business zones (HUBZones), and participation by religious, grantmaking, civil, professional, and other similar organizations.
View the Paycheck Protection Program Report through June 30th.
Loan-level data.

The Senate passed legislation to extend the Paycheck Protection Program application deadline until Aug. 8, sending it to the House hours before the SBA stopped accepting PPP applications.

The bill, which the Senate passed via unanimous consent, needs to be approved by the House and signed by the president to take effect. After the SBA has approved $520.6 billion in PPP loans through Tuesday evening, the program has roughly $130 billion in remaining funds.

The Senate bill also would decouple the PPP reauthorization from the SBA's 7(a) program to avoid shutting it down when the PPP expires. Politico reported that the Senate extended the PPP into August to give Congress time to pass the next economic relief package, which lawmakers are debating now.
​
ICBA continues calling on community bankers to use its Be Heard grassroots action center to provide lawmakers with comprehensive policy recommendations as Congress considers the next relief package.

Click here for SBA FAQ

Jun 12, 2020 via ICBA
​The Small Business Administration issued new Paycheck Protection Program application forms and an interim final rule implementing ICBA-advocated reforms to the program.

• Updated borrower application form
• Updated lender application form
• New interim final rule

The new rule revises the original PPP interim final rule issued April 2 and implements reforms included in the Paycheck Protection Program Flexibility Act of 2020, which was signed into law June 5 by President Trump.
Among its policies, the law extends from eight to 24 weeks the amount of time borrowers have to spend PPP funds while remaining eligible for forgiveness and lowers the amount that must be spent on payroll costs from 75 percent to 60 percent.
The rule notes that:

• 60 percent of the loan forgiveness amount must be payroll, but borrowers will receive partial forgiveness to the extent they fall short of 60 percent.
• The new five-year maturity term applies to loans that receive an SBA approval/loan number on June 5 or later.
• SBA and Treasury will provide further guidance on forgiveness, loan reviews, and advance purchases of PPP loans by SBA.

ICBA offers a summary of the law that community banks can share with borrowers. Meanwhile, ICBA continues calling on community bankers and small-business owners to urge Treasury and SBA to enact additional reforms to simplify the PPP process.

The Independent Community Bankers of America® (ICBA) called on the Treasury Department and Small Business Administration to make the Paycheck Protection Program loan-forgiveness process less complex and onerous for borrowers and lenders.

In a letter to the agencies, ICBA said an unnecessarily complex forgiveness process compromises the PPP's potential to facilitate a strong economic and jobs recovery.
"Borrowers should not have to hire accountants at expensive fees to assist with loan forgiveness," ICBA President and CEO Rebeca Romero Rainey wrote. "What’s more, borrowers whose first language is not English are struggling with the complex forgiveness forms and procedures and would greatly benefit from simplification."
With lenders under $50 billion accounting for more than 65 percent of approved loans and more than 63 percent of the approved dollar amount through two rounds of the PPP, ICBA called for:

• A shorter and simpler application form akin to the IRS Form 1040EZ.
• An online PPP loan-forgiveness calculator for borrowers and lenders.
• A forgiveness presumption of compliance for borrower-certified loans of $1 million or less.
• SBA to purchase residual PPP loans at par to support additional lending.
• Preserving the tax deduction for business expenses for PPP borrowers.

ICBA is calling on community bankers to provide Congress with policy recommendations to make the Paycheck Protection Program more workable for lenders and borrowers.
With Congress considering needed changes to the program, ICBA's Be Heard grassroots action center offers a customizable letter to lawmakers on pro-community bank provisions.

Contact Congress.

​As the environment in response to Covid-19 continues to be challenging, the California Community Banking Network (CCBN) is asking for relief and clarity from policymakers in order for community banks to focus on their customers and communities and further the overarching goal of reviving the country.
 
CCBN applauds the recent executive order signed by President Trump directing agencies to use all emergency authorities to swiftly rescind or temporarily waive restrictive regulations and is hopeful more can be done to help ease burdens on community banks and small businesses.
 
CCBN also supports the Independent Community Bankers of America’s (ICBA) recent letter to Congress urging inclusions to the next legislative package, which include recommendations addressing the Paycheck Protection Program (PPP).
 
SBA data shows the tremendous role community banks have played, funding more than half of the loans in the first PPP round. Community banks have been working tirelessly to fund and ensure the survival of small businesses throughout the country and continue to navigate through the PPP.
 
Current PPP guidance and criteria remain unclear and as community banks service these loans it is crucial that relief from any red tape is lifted to allow community banks to provide essential funding to keep small businesses alive. More specifically relaxing the PPP criteria and simplifying the forgiveness documentation will greatly alleviate the daunting challenges of this already obscure process.
 
As community banks continue to track, report and fund these loans, more reprieve and guidance is necessary. Community banks are seeking the reasonable discretion and prudence of regulatory agencies as they support small businesses and aid in economic recovery. 

From ICBA: 
​
The Small Business Administration issued an interim final rule extending the repayment date for the Paycheck Protection Program certification safe harbor. Under the revised policy, any borrower that applied for a PPP loan prior to April 24 and repaid the loan in full by May 18 will be deemed by SBA to have made the required certification in good faith. The deadline was previously May 14.

The rule also codifies the deadline extension for submitting the initial SBA Form 1502, for which the agency has yet to provide detailed guidance. As the SBA announced in the latest update to its PPP frequently asked questions, that deadline is now the later of: (1) May 29, 2020, or (2) 10 calendar days after disbursement or cancellation of the PPP loan.

Lenders are required to submit the form to report on PPP loans and collect the processing fees on fully disbursed loans to which they are entitled, though SBA 7(a) Fiscal and Transfer Agent Colson Services Corp. says in an online advisory that lenders should not report their PPP loans on Form 1502 until the SBA has released additional guidance.
​
Additional PPP guidance and resources are available on Treasury’s PPP webpage and ICBA's COVID-19 resource center.

The Small Business Administration's guidance on authorized uses of Paycheck Protection Program loans does not align with the CARES Act, the agency's inspector general reported.
The IG report notes that while the law does not set any restrictions on the portion of loans that must be used for payroll, an SBA interim final rule sets a 75 percent threshold.
The report also notes that the SBA's maturity term of two years undershoots the law's maximum term of up to 10 years, which could result in an unintended burden to PPP borrowers.
Read the report

In a letter, ICBA urged the agencies to:

• Reconsider the SBA’s non-statutory requirement that 75 percent of PPP loan proceeds must be spent on retaining payroll. ICBA recommends lowering the payroll expense requirement to no more than 50 percent to help small businesses meet other overhead costs.
• Provide a straightforward, easy-to-apply approach to loan forgiveness, such as developing a PPP loan-forgiveness calculator that will allow borrowers and lenders to easily determine the forgiven amount.
• Establish a presumption of compliance for all loans with an original balance of $1 million or less based on the borrower’s certification that the funds were used in accordance with the terms of the program.
• Address the many questions that have arisen related to PPP loan forgiveness, such as the consequences if borrowers spend less than 75 percent of their PPP loans on payroll and what constitutes full-time staff and new hires.

From SBA: ​
​SBA and Treasury value all lenders and their small business customers.
To ensure access to the PPP loan program for the smallest lenders and their small business customers, starting at 4 p.m. today EDT through 11:59 p.m. EDT, SBA systems will only accept loans from lending institutions with asset sizes less than $1 billion dollars.
 
Please note, lending institutions with asset sizes less than $1 billion will still be able to submit PPP loans outside of this time frame. Please also note that lenders with asset sizes greater than $1 billion will be able to submit loans outside of today’s 4pm -11:59pm EDT reserved processing time.
 
This reserved processing time applies today April 29, 2020. SBA and Treasury will evaluate whether to create a similar reserved time again in the future.
 
SBA and Treasury continue to monitor loan system performance and will continue to provide frequent updates to the lending community.